Judge: Snow faces 'substantial jail time'

Sentencing for one of the defendants who pleaded guilty to participating in a multi-million dollar mortgage fraud scheme has been delayed until Dec. 7.

However, the federal judge handling the case told Carrie Snow Monday that she is "looking at substantial jail time" for her role.

Snow, along with Roger Ritch, William McMahan, and Jonathan Henderson, was charged in May with bank fraud and money laundering in a scheme involving hundreds of homes in Shelbyville. Bradley Aydelott was indicted on the same charges in July.

All have pleaded guilty to counts one and four of the federal indictment, which states that they obtained financing under false pretenses and falsely represented the employment status and income of borrowers.

The Bedford County Sheriff's Department says the scheme involved the sale of houses by Ritch's company totalling approximately $30 million, and foreclosure on the fraudulent loans has resulted in a loss to lenders totaling approximately $2.4 million.

While defense attorneys for Snow asked for a delay in the sentencing, courtroom observers informed the T-G that United States District Judge Harry S. Mattice told Snow she was "looking at substantial jail time."

Last week, Snow's attorney, William C. Killian of Jasper, submitted a sentencing memorandum, which asked the federal judge to only include the number of the illicit transactions she participated in when determining her punishment.

However, federal prosecutors stated that the public's confidence in lending institutions has been shaken and that "a substantial period of incarceration will go a long way in restoring that confidence."

A total of 61 people who bought homes lost them through foreclosure as a result of the scheme, according to assistant United States Attorney Gary S. Humble's response to Snow sentencing memorandum.

"The buyers were put into houses they could not afford and lost what little money they had put into the houses," Humble said, adding that Snow was involved in $1.9 million of the total $2.4 million fraud committed.

The response to Snow's sentencing memorandum also contained copies of FBI interviews with Snow and Ritch that detailed how the scam worked (see related story below.)

Humble also told the court that there have been more than 100 bank failures this year alone and that the Federal Deposit Insurance Corporation (FDIC) fund is getting to the point where the FDIC may have to go to the Treasury for more money to shore it up against more anticipated failures.

"The conduct in this case is just the kind of blatant criminal conduct that is endangering that fund and the safety of our banks," Humble said in asking for an appropriate sentence for Snow.

"The message needs to be sent to would-be criminals and to the public that this behavior will not be tolerated."